The largest percentage of ActiveCollab users are digital agencies. Therefore, we took upon ourselves to understand and try to resolve their pain points.
So, we asked around a bit and figured out the following: most common digital agency pain points are somehow related to clients.
Here are the problems and potential solutions in words of digital agency owners and managers.
1. We lost the biggest client
Solution: Take a wild risk, pivot if necessary
In 2016 SF AppWorks lost their biggest client, and with it, their main source of income. This digital agency quickly realized that they were nothing special - like many others, they solved technical and digital problems companies had. According to Andrew Greenstein, the company's CEO, to create business for themselves they had to take two major risks - invest in sales and pivot.
Plan A was to invest in sales. We have plenty of inbound marketing material, but we have never ‘knocked on doors’ to distribute that material. We didn’t want to risk bothering people, but we had already decided to act as though our plans would work, not as if they might.
However, we still needed a plan B, just in case our investment in sales wouldn’t yield enough new clientele to support the business. What we needed was a venture-fundable startup idea. After two months of heavy market research, brainstorming, and planning, we came up with progressive web apps, chatbots and engagement platforms that use AI to predict when users are going to quit. A year later and we are a different company: our revenue is balanced across five primary clients and we’re working with all sorts of interesting AI-based technologies.
There are years marked by transition and others marked by growth. Sometimes you tear things down and rebuild, while other times you double down on your momentum and see where it takes you.
2. Unrealistic client expectations
Solution: Have your client expect average results
Handling a client that has no clue about job requirements can be frustrating, and even counterproductive at times. If you come across this type of client, the worst thing you can do is accept their impossible requests without asking any questions. By doing so, you will place yourself in an awkward position that requires balancing tight deadlines and sometimes impossible expectations. Always set boundaries. For example, Bradley Shaw of SEO Expert Brad Inc. believes in under promising and over delivering.
Beginning with the initial sales process, we educate prospects and establish realistic expectations, being very clear on what we are going and not going to do. Also, we provide case studies that show natural, organic growth. In fact, we go out of our way not to show them our best case studies, as these do not reflect the typical results.
If we feel a customer continues to have unrealistic expectations after our education process, we decline to take them on. Once a client signs on with our agency, we use regular updates and communication to maintain reasonable expectations, allowing the client to understand our process.
In our client agreement, we state twice, once at the top, and once at the bottom that Google is a marathon, not a sprint. Under promising, and over-delivering helps.
3. Too many clients
Solution: Be realistic about how much work can you take on
Fast growing and ever expanding, digital agencies depend on a large number of clients - whether they like it or not. So agency owners and managers often take on more clients than their employees can handle. Jessica Carr, an owner and marketing consultant at j.carr marketing, says that employee bandwidth is the biggest problem she faced at all previous agencies she worked at.
The solution to this problem is to slow down. I realize it is not ideal for fast-growing businesses, but it has to be done. Take on only the amount of new clients that your Account Managers and Leaders can efficiently manage. There is no point in taking on new clients if you can’t keep your current clients happy.
This solution will also keep your team content, create a better work atmosphere and better performance. You’ll see more client success, and that will enable you to hire more AMs and take on more clients. Just remember to bring in experienced people, as hiring entry-level staff can cause even more stress.
Jessica never turned down a client even when she felt over engaged. However, she claims she is always realistic with her clients when it comes to the timelines during the critical period. Those who want quality work delivered will just have to be patient.
4. Collecting Invoices (or simply - getting paid)
Solution: Monthly ACH withdrawal or credit card deduction
In its early days, digital marketing agency called The Media Captain had trouble collecting invoices. According to its president Jason Parks, it took five years for this digital agency to make a U-turn and change the way they collect money from clients. It all started with changing the initial contract.
In the contract, we stated that each month on a certain date, there would be an ACH withdrawal or a credit card deduction, whichever option they agreed to. This drastically helped us with cash flow and saved us time having to follow-up with clients 3-4 times to collect on invoices.
Personally, I believe that once an agency gets over five clients, it can start implementing this process. The short-term benefits are that you collect money more quickly, which helps with cash flow. The long-term benefits are that you can plan for the future. You don't have to worry about whether or not a client will pay; you can just focus on enhancing their digital campaigns.
As far as our business is concerned, there was no decrease in the number of clients after implementing this procedure. Additionally, it has saved us time and money as it weeded out illegitimate prospective clients. Older clients are grandfathered into the old billing cycle, so it isn't like we changed this across the board. It is more for new incoming business.
5. Client “forgets” to pay after the job is done
Solution: Deposit and penalties for not paying an invoice in full
You’ve completed and delivered your work. Client approves it and promises to pay the invoice in the next few days. Several weeks pass, and nothing happens. When confronted, client claims that they forgot to pay. They promise to pay once again... And the cycle continues. Well, Monika Jansen of Jansen Communication chose a more direct approach to handle “those who do not pay”.
From time to time we came across clients who would decide that paying for completed and delivered work is optional. To combat this, I've put into place four procedures that minimize getting stiffed.
Work with an attorney to draft a contract that spells out late fees or other penalties for not paying an invoice in full.
Never start any work until the contract is signed and the deposit is in your bank account. We started accepting credit card payment, and it has greatly sped up the time it takes for us to get paid. The expense for fees is worth it.
Forget the net 30-day rule - all invoices are due upon receipt.
Short-term benefits of this approach are an immediate buy-in by the client and steadier cash flow. Over the long-term, this approach will weed out potential clients who are not a good fit - the ones who don't value marketing, who don't want to invest in it, and who think everything should be free.
6. Client company has poor internal communication
Solution: Written sign-offs after each client meeting
Even though you had a productive client meeting and agreed on the course of action, another stakeholder from the same client company who didn’t attend the meeting decides to change what you have already agreed upon. According to Richard Howe, the owner of Colour Rich these problems can be minimized by utilizing written sign-offs.
On most occasions, sign-off will come as an instant result of the meeting - but only if we receive explicit instruction from the project leader. If there is any doubt that another stakeholder may have a different solution in mind, I always suggest that decision gets confirmed internally first.
This can set the timescale back, but it’s often unavoidable. The most important thing to communicate is that nothing will be done until their final decision. This speeds up the process and prevents making bad decisions.
But what happens when stakeholder in a position of power tries to override the sign-off?
We faced this predicament on several occasions. In these situations, we would suggest sticking to the written sign-off, as client's budget and timescale is based on the number of hours needed to complete a task.
Taking into consideration that it's nearly impossible to factor in unforeseen internal issues, reversion or change to the module under development has to be treated as additional work - and that means extra time and cost.
7. Clients feel communication is artificial
Solution: Use tools that allow them to see your face and hear your voice
May sound unusual, but not being certain whom are you speaking to can be a serious obstacle to establishing a meaningful client relationship. Owner and Founder of ThinkLions Mike Sims says that using means of written communication exclusively(e.g., email and chat) can have a negative effect on building trust with potential clients.
Trusting someone who you can’t see face to face can be difficult. To combat this, we use digital tools like Google Hangouts to maintain face-to-face remote team communication and conferencing software to maintain communication with our clients.
At every turn, we try to make sure potential customers see us as a brand of real people: we can be reached by phone and email, clients know our team by their names, and we make sure to reach out to clients on a regular basis personally. Just because an agency is digital, it doesn’t mean that it has to feel artificial.